PARIS -- IT Security firm Sophos is pleased to see the U.S. Securities and Exchange Commission (SEC) again take action against pump-and-dump scammers luring victims through spam email campaigns. Several media reports today indicated that the SEC is seeking injunctions against three men responsible for a recent pump-and-dump scam that raised approximately $6.5 million for the culprits.
Pump-and-dump scammers cleverly manipulate victims holdings by liquidating assets and refilling those portfolios with microcap stocks. The scammers, already invested in the same microcaps, are then able to liquidate their holdings for a substantial gain. In this case, it is alleged that these three gentlemen inflated the stock offerings for the following companies, which they formed for this scam; Emerging Holdings, Inc., Massclick, Inc., and China Score, Inc.
In the past several months pump-and-dump scams have continually made the headlines, said Ron OBrien, senior security analyst at Boston-based Sophos. We are extremely pleased to see that these headlines are now more often than not reporting on the legal actions being taken against the individuals responsible for the scams.
In addition to the SEC, the U.S. Department of Justice and the U.S. Attorney for the Eastern District of Virginia have also filed charges against the three individuals responsible, two of whom have already been sentenced to jail time.
By continuing to issue strict punishments for these schemes and educating the general public on how to avoid being victimized, we are in a good position to reduce the frequency and impact of these events, adds OBrien.